Food prices may keep inflation high

Syllabus: GS-III

Subject: Economy

Topic: Inflation

Issue: Inflation

Context:  A slight decrease in food price inflation contributed to a three-month low    in retail inflation.

Prelims connect:

Inflation is an increase in the prices of goods and services.

Core inflation Vs headline inflation:

  • Core inflation = Headline inflation – (Food and Fuel) inflation.
  • Headline Inflation is the measure of total inflation within an economy.
  • It includes price rise in food, fuel and all other commodities
  • Core inflation does not consider the inflation in food and fuel

Wage price spiral:


  • A wage price spiral occurs when workers demand higher wages in response to rising prices, and employers raise prices in response to higher wage costs.
  • This can create a cycle of wage increases and price increases, leading to overall inflation in the economy
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